CONGRESS TO FORGE BICAM BILL ON TAX INCENTIVE TRANSPARENCY

CONGRESS TO FORGE BICAM BILL 

ON TAX INCENTIVE TRANSPARENCY

More transparency in the grant and management of tax incentives is going to be expected with the passage of the Tax Incentives and Management Act (TIMTA) sponsored by AAMBIS-Owa Party-list Representative Sharon S. Garin and 12 other congressmen.

“It is government’s obligation to the people to monitor, review, and analyze the economic impact of granting tax incentives to businesses in order to optimize its desired social benefits,” Rep. Garin, Vice-Chair of the House Committee on Ways and Means said.

Tax incentives refer to fiscal incentives the government offers to encourage businesses to make investments in property or operate in particular areas which will result to job generation and more vibrant economy.

Tax incentive could be in the form of income tax holidays, exemptions, deductions, credits or exclusions from the tax base as provided by law to qualified private individuals or corporations.

The consolidated bill of the House of Representatives on TIMTA, House Bill 5831, will be merged with the senate version prepared by the Senate Committee on Ways and Means with Senators Franklin Drilon, Ralph Recto, and Juan Edgardo Angara as authors.

If HB 5831 becomes a law, businesses availing of the incentives shall file with the Board of Investments (BOI) and other relevant Investment Promotions Agencies (IPA) within six (6) months from the statutory deadline an application for income tax holidays in order to give government sufficient time to study economic impact of granting such exemptions.

The BOI and the relevant IPA shall within 30 days from the end of the said six 6 months period, submit to the Bureau of Internal Revenue (BIR) a report containing the list of businesses that filed applications. The BIR shall validate the findings of the BOI and IPA.

The incentives claimed by business entities shall be deemed approved in case of inaction or failure of the BIR to inform the BOI and the BOI-registered business entities of the results of BIR’s validation within six (6) months from notice of the endorsement or recommendation of the BOI.

The Department of Finance (DOF) shall keep the data of actual amount of tax and duty incentives granted to businesses under a single database for monitoring and analysis.

In the senate version, any government official or employee who fails without justifiable reason to provide or furnish data or information shall be punished by a fine equivalent to that official's or employee's basic salary for a period of one (1) month to six (6) months, or by suspension from government service for not more than one (1) year, or both. /MP